With Labour reeling from the worst electoral drubbing for four decades, you could argue that this week is not a good moment to bring out an exhaustively researched, carefully thought-out report on the blight of insecure, low-paid work in the UK, 18 months in the making. But this Wednesday was set for the date of the launch of the TUC's Commission on Vulnerable Employment (of which I've been a member) many months back, and no one envisaged then that one of the biggest research initiatives of the TUC since 1997 would thump its catalogue of the inadequacies of Labour employment policy on Brown's desk at such a point of desperate soul-searching. But I would argue that this investigative analysis is exactly what Brown needs if he is to understand what happened last Thursday.

Brown makes much of his commitment to poverty. Even his most grudging critics concede that some headway has been made on child poverty even if it has not been enough. But the headline figures obscure how stubbornly persistent the phenomenon of working poverty has been. Many poor families may now have an earner, but it has not got them out of poverty: the number of poor children living in working households is 1.4 million - exactly the same figure as it was in 1997. Half of all children living in poverty have a parent in work. The advances in child poverty have been among those on benefits, while the number of poor working households with children has actually increased by 200,000. Labour promised it would "make work pay". It hasn't.

Low pay is not just a problem of an extreme underclass or of migrants; it is endemic across the country. One in seven of all working households are poor; one fifth of all workers, 5.3 million people, are paid less than £6.67 an hour (two thirds of the median), the worst low-pay rate of any in Europe. It works out at less than a £12,000 salary. In some regions, the proportion of low-paid is well over 25%, while in some constituencies (in Wales, Birmingham, the West Midlands, even the rural West Country) it is comfortably over 40%. For those scratching their heads over the mystery of Labour losing Merthyr Tydfil, perhaps they should look at the pattern of low-paid, insecure work. This is the shocking record of a country after 11 years of Labour rule and economic boom. It explains why the 10p tax debacle caused such resentment: these are the "hard-working families" extolled in Brown's speeches and yet they are scrabbling to make ends meet. The Brownite rhetoric of "unleashing potential" is a nonsense to those trapped in jobs that consign them to fall ever further behind.

This report challenges another of Brown's much-used rhetorical flourishes: fairness. He talks of it as a national characteristic, but it's not one that the 5 million-strong army of low-paid, insecure workers would recognise. This is the section of the labour market where regulations about the minimum wage, holiday pay and employment rights reach only intermittently or not at all. The chance of an employer being inspected on the minimum wage is once every 330 years. Given such odds, an unscrupulous employer takes the risk.

Labour has made much of bringing in the minimum wage and the working time directive (which gave many workers their first rights to paid holiday) but after these advances, the reality is that progress in tackling Britain's chronic problem with low-paid, insecure work stalled. Increases in the minimum wage are not keeping pace with average earnings, and it is set at a considerably lower rate than in other countries. A combination of political cowardice (Brown didn't want a fight with the CBI) and indifference - it earns no political capital with middle England - ensured that Labour has repeatedly prevaricated in tackling this brutal underside of Britain's economic boom. It has fudged crucial issues such as equal treatment for agency workers or the much-needed clarification on worker status, a legal loophole which makes a mockery of employment rights - both were manifesto commitments.

The months of sitting on the commission listening to people's accounts of their working lives and to those who tried to offer advice when things went wrong provided a glimpse of what an obstacle course it is when you're poor. It's not always the lack of material resources that cuts deepest, but the lack of power and the absence of options. When you're sacked or when you don't get the sick pay or holiday pay you are owed, how do you fight back? How do you find the employment adviser to help or the courage to stand up to an employer and the sheer guts to take a case to an employment tribunal with no legal aid or a lawyer to help you? The answer is that more often you don't, you can't - and that's how you get trapped in bad jobs.

Poor pay is inextricably bound up with a culture of institutional negligence: no one ensures workers know their rights or how to find out about them; a myriad of enforcement agencies with tiny budgets confuse everyone, and the legal system to arbitrate on abuse is slow and inaccessible. While the government has consulted and dithered, low-paid, insecure work has flourished like some rapacious mould. The face-to-face legal advisers (which the most vulnerable are known to find easier to deal with) have been axed and replaced with cheap websites and telephone helplines (but how do you know about them?). English language lessons have been cut. While millions of pounds are devoted to advertising for benefit fraud, the amount allocated to advertise the national minimum wage was, until a recent increase, a sixth of that spent on a government campaign urging people to use tissues when they sneeze.

Here is a compelling moral purpose on which that famous Brown compass could take its bearings. I haven't a clue if it will restore his electoral fortunes, and frankly that's not the point. This is an issue that any Labour government worthy of its name should have sorted out by now and yet it has devoted a fraction of the effort and energy required. If Labour cannot ensure that at the end of a hard week's work, someone has earned enough to keep themselves and their children out of poverty, then it doesn't deserve power.

Tony Blair boasted that Britain was the "most lightly regulated labour market in the world". The OECD puts Britain second only to the US for the lowest levels of employment protection in the developed world. This is Cowboy Boss Britain and it leaves a long trail of anger and resentment - the Citizens Advice Bureau alone deals with over half a million employment problems a year.

The most frustrating aspect of these meetings, though, was with the representatives from the political parties. Labour's was doggedly complacent; the Conservative's, all charm, finally admitted he knew nothing; the Liberal Democrat's didn't seem to have quite worked out which meeting they were in. It was a deeply depressing demonstration of how detached the political process has become from issues which are absolutely basic to the lives of millions of people.